Soaring prices for food and oil force the world’s second-largest nation to burn more coal as record heatwave sears its wheat crop

(Originally published May 5 in “What in the World“) A deadly heatwave in India is killing its wheat crop, dousing hopes that the country could help offset the loss of Russian and Ukrainian exports. After five consecutive years of record harvests, lower production in the northern states of Haryana, Madhya Pradesh, Punjab and Uttar Pradesh could pull India’s overall wheat output down as much as 6% below the government’s projections.

While India is the world’s second-largest wheat producer, it consumes most of that harvest at home. Bumper crops raised hopes it could export more and use the proceeds to offset a rising bill for imported energy.

But that’s just the beginning of the economic challenges to India from climate change, the pandemic’s toll on supply chains and Russia’s war on Ukraine. India is also the world’s second-largest consumer of cooking oil consumer and the world’s largest cooking oil importer, 20% of which typically comes from Indonesia, which has banned exports of palm oil to shelter its own population from rising prices.

Faced with soaring prices for food and energy, India has responded by boosting production of domestic coal and following the U.S. Federal Reserve with its first benchmark interest rate increase in two years.

Ukraine’s grain exports in April dropped by two-thirds, largely due to the war’s impact on its seaports. The country has been trying to ship grain out by rail, but Russian forces have recently begun targeting that infrastructure, partly in an attempt to stanch the inflow of Western military aid.

That means that stocks from Ukraine’s bumper harvest last year are piling up and the nation is quickly running out of storage as the summer harvest of this year’s crop approaches. The war could slash the amount of land available to sow this year’s crop by as much as 25%.